UN to U.S.: Don’t Tariff the Poor Over Pennies.

Low paid clothing factory workers could lose their jobs due to tariffs in the US. Image by Editor.

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As world leaders and markets deal with problems caused by trade tariffs, Rebeca Grynspan, head of the UN trade agency (UNCTAD), said poor countries should be excused from the effects. These countries barely affect trade deficits and are the most at risk.

She spoke after the UN raised concerns about how ongoing uncertainty could harm the weakest economies.

Earlier in the week, UN Secretary-General António Guterres warned that “trade wars are extremely negative” and could have “devastating” effects.

Tariffs are taxes on imported goods, usually paid by the exporter. These costs are usually passed on to buyers.

In an interview with the Financial Times, Ms. Grynspan asked the U.S. to rethink its tariff strategy. She said the 44 Least Developed Countries make up less than 2% of the U.S. trade deficit, and raising tariffs would worsen their debt problems.

Speaking to UN News, she explained how UNCTAD helps poorer countries and encourages regional trade partnerships to give them more power in global trade talks.

Q: Should we worry about the U.S. and China putting tariffs on each other?
Grynspan: Yes. When the two biggest economies add tariffs, everyone is affected. We’re already in a time of slow growth and high debt. Poorer nations and small islands are most at risk.

Q: Could this end the current global financial system?
Grynspan: It’s unclear. What hurts most is the uncertainty. If we knew the outcome, we could plan. But not knowing stops investment. Business leaders are holding back, and that slows the economy even more. We need clear and smart decisions.

Q: Are your concerns about poor countries being heard?
Grynspan: I don’t think anyone else has shown, like we have, that these countries don’t add to the U.S. trade deficit. Their exports are mostly basic goods, often already exempt. These exports help U.S. production and are not a threat.

She suggested that it would be better to skip new negotiations and simply spare these countries from tariffs.

Q: What would you say to a factory worker in Viet Nam or Madagascar?
Grynspan: It’s hard to give advice since the impact differs by country. For example, Madagascar’s biggest export to the U.S. is vanilla. They barely affect the U.S. trade deficit, so there’s no sense in punishing them with tariffs.

Q: How does UNCTAD help developing countries?
Grynspan: We study trade, investment, and finance to support development. We don’t negotiate trade deals, but we help countries make the most of trade opportunities and strengthen their economies.

Q: Can regional trade help in this situation?
Grynspan: Yes. Africa’s Free Trade Area could grow the continent’s economy by $3 trillion. If African countries act quickly, they can benefit from bigger markets and better trade deals. They also need to move away from depending only on raw materials.

Other regions, like Southeast Asia through ASEAN and parts of Latin America through Mercosur, are also building stronger trade partnerships. These could help a lot right now.

Source: United Nations.

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